BNP Paribas AM: Infrastructure debt: powering ahead

Infrastructure debt has become an essential asset allocation component for investors looking to diversify their credit exposure with assets offering steady cash flow, an attractive risk/return profile compared to fixed-income instruments with an equivalent credit quality.

With USD 108 billion of infrastructure debt deals closed in 2017, up 29% on 2016, infrastructure finance in Europe is booming. Increasingly, infrastructure is being accepted by investors as an asset class. Financial investors are willing to commit more capital to the market, underpinned by solid merger and acquisition (M&A) activity throughout Europe.

For institutional investors, there is an added attraction: eligible infrastructure debt benefits from a favourable Solvency II capital ratio.

Read our expert’s view on the breadth and quality of investment opportunities offered by infrastructure debt.